Belt & Road Initiative (BRI) – The New Silk Route In 2013, China declared its ambition to re-activate the now defunct Silk Route through a modern and massive project that would connect it with more than 65 countries in Asia, Europe, Africa and the Middle East. The project is dubbed “Belt and Road Initiative” (BRI). This concept is alternatively known as “One Belt, One Road” (OBOR)” . The project is expected to cost between $4-8 trillion and would affect about 62% of the world’s population and 40% of its economic output. The major aim for the Chinese in developing BRI is to have a long term strategic influence in world trade, open up new trade markets for its goods and give it the cheapest and easiest way to export materials and goods. China had always been at the forefront of world affairs. One major area of its influence is trade. This is facilitated by its present state of development, population and wealth. One of the major idea that it was known for was the old Silk Route.
What Is the Silk Route? The Silk Route was a historic trade route that transverses from the Asian continent to the Mediterranean, passing through China, India, Persia, Arabia, Greece and Italy. It dated back to the 2nd century BC. Although diverse commodities were traded along this route, the predominant commodity was silk of which China had the monopoly as at that time. Other items that were traded spices, grains, fruits and vegetables, animal hides, wood and metal work, precious stones, and other items of value.
Silk Route 2.0 BRI would be made up of several network infrastructures. These include: Key among the specific projects to be implemented are: China has been facilitating these projects through various Chinese companies. The funding for the projects are provided by the government as either grants or loans, but most are provided as loans for the benefiting countries. To date, there had been cases where countries have defaulted in their payment and the Chinese companies have taken over the local facilities of the defaulting countries. In Pakistan, for example, a deep-water port in Gwadar is being funded by loans from Chinese banks to the tune of $16 billion. The interest rate on the loan is over 13%. This means that if Pakistan defaults, China could end up taking all sorts of collateral or outright taking over the project as it did in Sri Lanka. China had funded the construction of the Hambantota Deep Water Port up to the tune of $8 billion loan. When Sri Lanka was unable to pay up, it surrendered the controlling interest in the port to a state-owned Chinese company as a means of writing off the debt. The agreement had given the control of the port to China on a lease of 99-years. Currently, China has passed several milestones related to the OBOR project, including the signing of hundreds of deals since 2016.